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Coke criticized for close relationship with Swaziland’s king

Often, there’s a value in examining crisis stories that goes beyond a simple “Be glad you’re not them” sentiment. Many serve as case studies or cautionary tales of crises that could easily happen to countless other companies or brands, no matter how big they are.

Some, on the other hand, could happen only to massive global brands. Take, for example, the recent criticism that has been lobbed at Coca-Cola Co. over its cozy relationship with a king.

A former minister in the African nation of Swaziland told The Wall Street Journal that King Mswati III “does everything they say,” referring to Coke purported influence. Coke didn’t confirm it, but the minister says the soft-drink company pays a 6 percent corporate tax rate, while all other businesses pay 27.5 percent.

Why the cozy arrangement? Coke has a major bottling plant in Swaziland. It’s so big that it accounts for more than half of the country’s exports. Plus, the company has spent considerable money—$5 million in three years—to improve the country’s water and medical systems.

However, the royal family has come under fire for what human rights groups call repressive politics. That puts Coke in the tough position of seeming to be in bed with a problematic regime.

Coke responded with a written statement. It said, in part:

As a company policy, we do not take positions on the affairs of sovereign governments. We operate with the highest standards of integrity in Swaziland just as we do in any of the more than 200 countries where we do business.

Our senior leaders do not regularly meet with King Mswati, nor do they serve as ambassadors on behalf of Swaziland.

The Journal article lists a few other companies that have been similarly criticized for their dealings with foreign governments, and they’re all giants, too: Nestlé, ExxonMobil, and Odebrecht SA, a Brazilian construction firm.